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Bargaining and idle public sector capacity in health care

Pedro Barros () and Xavier Martinez-Giralt ()

No 170, Working Papers from Barcelona Graduate School of Economics

Abstract: A feature present in countries with a National Health Service is the coexistence of a public and a private sector. Often, the public payer contracts with private providers while holding idle capacity. This is often seen as inefficiency from the management of public facilities. We present here a different rationale for the existence of such idle capacity: the public sector may opt to have idle capacity as a way to gain bargaining power vis-à-vis the private provider, under the assumption of a more efficient private than the public sector.

Keywords: negotiation; health care (search for similar items in EconPapers)
JEL-codes: I11 I18 (search for similar items in EconPapers)
Date: 2005-03
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